AAT L3 Indirect Tax (UK VAT) 4

Question 1

The reverse charge for VAT applies when:

Accepted Answer

A UK VAT-registered business receives certain services from an overseas supplier and self-accounts for the VAT

Answer

A UK consumer buys goods from a UK retailer

Answer

A business issues a credit note to a customer

Answer

A business has a bad debt

Question 2

Bad debt relief for VAT is available when:

Accepted Answer

The debt is over six months old from the due date, has been written off, and full VAT was originally accounted for

Answer

A customer delays payment by more than 30 days

Answer

The business is a cash accounting scheme user

Answer

The customer is a VAT-registered business

Question 3

Making Tax Digital (MTD) for VAT requires businesses to:

Accepted Answer

Keep digital records and submit VAT returns using compatible software

Answer

Submit paper VAT returns quarterly

Answer

File annual accounts online

Answer

Pay VAT monthly regardless of turnover

Question 4

If a business uses the standard VAT accounting method and a customer does not pay an invoice, the business:

Accepted Answer

Has already paid output VAT to HMRC and can reclaim it after 6 months if the debt is written off

Answer

Does not pay output VAT until the customer pays

Answer

Automatically receives a credit from HMRC

Answer

Cannot reclaim the output VAT under any circumstances

Question 5

The default surcharge regime for late VAT returns and payments has been replaced by:

Accepted Answer

A late submission penalty points system and late payment interest/penalties

Answer

Fixed penalty notices

Answer

Automatic doubling of the VAT liability

Answer

A referral to the criminal courts

Question 6

A business intending to make only exempt supplies should:

Accepted Answer

Not register for VAT as it cannot reclaim input VAT

Answer

Register for VAT voluntarily

Answer

Register but use the flat rate scheme

Answer

Apply for partial exemption status